MALAKOFF Bhd expects its acquisition of a 40% stake in Tenaga Nasional Bhd's (TNB) Kapar plant to be sealed by the end of April, said chairman Tan Sri Abdul Halim.
“Negotiations are still ongoing and most major agreements have been reached. We are confident that we can close the deal by the end of April,'' Halim said, adding that some minor issues needed to be fine-tuned.
The independent power producer (IPP) has been in talks with TNB to buy a stake in the 2,420MW Kapar coal, oil and gas fuel power station in Selangor for almost 3½ years.
Malakoff subsidiary Kapar Energy Ventures Sdn Bhd (KEV) entered into a conditional asset sale agreement with TNB to buy the plant for RM6.27bil in August 2000.
The purchase consideration was later revised downwards to RM4.2bil in January 2002. The selling price of electricity produced by the Kapar plant was also reduced to 10.62 sen per kiloWatt-hour (kWh), from 13.5 sen initially.
Halim said the group was looking at several options to finance the acquisition of the 2,400megawatt (MW) power plant, including the issuance of bonds and bank borrowing.
“We are evaluating all prospects,” he said after the company's AGM in Kuala Lumpur yesterday.
The acquisition will expand Malakoff's effective generation capacity by 968MW and also enhance its earnings.
The IPP's current generation capacity is 1,545MW through its stakes in the Lumut power plant, GB3 power plant and Port Dickson power plant. It is presently constructing the 2,100MW Tanjong Bin power plant, of which the first phase of 700MW is scheduled to commission in August 2006.
An analyst estimates a four-month net profit contribution of RM15mil from the Kapar plant to Malakoff's current financial year ending Aug 31, and an annual net profit of RM55mil in the next financial year.
Nonetheless, most analysts concur that the acquisition has been factored into Malakoff's share price.
“Many analysts would have imputed the contribution from Kapar plant in earnings from April onwards. It will be a relief when the deal is sealed. But I won't expect much excitement in the stock,'' said an analyst, who added that there would be significant earnings growth in financial year 2007 when the Tanjung Bin Power plant started operation.
Malakoff managing director Ahmad Jauhari Yahya said the IPP was seeking opportunities to tap the foreign market.
“We are exploring several countries in Asia,” he said.
He also said Malakoff might form partnerships for its overseas ventures in certain countries if necessary.
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